Learning that plans to improve the East Washington Street interchange before the freeway is widened are in jeopardy, the Petaluma City Council on Monday said more money should be sought in order to salvage the project.

A $3.6 million shortfall for the $25 million project is preventing the city and Caltrans from moving ahead with the interchange improvements, officials said.

The project, on the drawing boards for several years and with design work half done, would feature a new northbound on-ramp behind the Petaluma Plaza shopping center and soundwalls separating the freeway from neighboring backyards.

The city?s public works department had proposed delaying the start of construction until the freeway is widened, saving money to be used for soundwalls and right-of-way purchases.

But council members said that would mean postponing the work until some unknown date because the freeway widening through Petaluma isn?t fully funded.

Instead, local and regional transportation agencies should work together to bridge the funding gap and keep the interchange work moving forward as a stand-alone project that can be finished before the freeway widening, the council said.

That could be accomplished on two fronts: Delaying a payment to purchase part of Regency Centers? property at the old Kenilworth Junior High site to build a new southbound on-ramp, and seeking more money from the 2004 Measure M transportation sales-tax increase in Sonoma County.

The need to pay up to $2.2 million in ?fair market value? for about an acre of Regency?s land wasn?t known until discussions with company officials, the city said.

?Staff assumed Regency would donate right-of-way or that dedication would be imposed as part of the entitlement process? for Regency?s proposed shopping center, public works director Vince Marengo said in a report to the council Monday.

But Mayor Pamela Torliatt suggested that officials work out an agreement with the developer to delay payment for the land until the freeway widening is fully funded.

That would save $2.2 million and the remaining $1.4 million could be re-allocated from the portion of Measure M set aside for Petaluma freeway projects, Torliatt proposed.

Measure M allocated $17.5 million for freeway widening in the Marin-Sonoma Narrows portion of Highway 101.

?I would like to see us salvage the interchange project,? Torliatt said.

The Sonoma County Trans-portation Authority board of directors would have to decide whether to re-allocate Measure M money to the interchange project. The board is expected to take up the request at its December meeting.

(Contact Corey Young at corey.young@arguscourier.com)